Bourse hits near 7-week high despite Rs. 4 b net foreign outflow

Saturday, 5 April 2014 00:14 - - {{hitsCtrl.values.hits}}

Reuters: The Sri Lankan index gained for the third straight session on Friday to hit a near seven-week high, led by large caps such as Ceylon Tobacco Co Plc, while foreign investors sold conglomerate John Keells shares, boosting the day’s turnover. The main stock index ended up 0.6%, or 36.08 points, at 6,054.55 – its highest since 17 February. Foreign selling accounted for 88.7% of the day’s Rs. 5.04 billion ($ 38.58 million) turnover, well above this year’s daily average of Rs. 1.01 billion. The Bourse saw a net foreign outflow of Rs. 4.08 billion worth of shares extending the net foreign selling so far this year to Rs. 9.6 billion. Shares in Ceylon Tobacco rose 2.47% to Rs. 1,075, while shares in Sri Lanka Telecom Plc rose 2.72% to Rs. 49.10. The top conglomerate John Keells Holdings Plc, which ended flat, saw a net foreign selling of 16.94 million shares. Analysts, however, said investor sentiment is yet to recover after the United Nations announced it would probe alleged war crimes by the country. The UN last week launched an inquiry into war crimes allegedly committed by both Sri Lankan State forces and Tamil rebels during a conflict that ended in 2009, saying the Government had failed to investigate properly. Analysts said the outcome of the resolution was expected, but investors’ sentiment has been dented over concerns it could hurt the country’s economy. Several potential buyers of risky assets are awaiting a clear direction.

Rupee edges up on remittances, local demand

Reuters: The rupee ended slightly up on Friday after gaining 0.2% in early trade as banks sold dollars to meet customer demand for the local currency and on dollar inflows from remittances ahead of the festive seasons, dealers said. The spot rupee strengthened to 130.40/50 per dollar in early trade on banks’ selling of the greenback before retreating to 130.60/65 as a State bank, through which the central bank usually directs the market, bought the dollars for up to Rs. 130.60. It closed at 130.63/65 per dollar on Thursday. “Bank selling of (dollars) for festive demand strengthened the rupee. A State bank bought dollars probably for oil bills,” said a currency dealer asking not to be named. The local currency was steady at 130.70 per dollar for the six sessions through Wednesday as dealers were reluctant to trade the rupee beyond 130.70 per dollar through Wednesday due to moral suasion by the Central Bank. But they said the depreciation pressure is expected to ease due to expected inflows from remittances that will prompt dollar selling by banks. Dealers said lack of credit demand for imports will help reduce downward pressure on the rupee. The currency has gained 0.34% since 27 February, but has lost 0.11% so far this year, Thomson Reuters data showed.